"The great difficulty in commenting on the draft report of the Review of National Energy Markets is that it is divorced from a national strategic energy policy which would allow the operation of energy markets to be set in a proper context," Mr Barry Jones, Executive Director of the Australian Petroleum Production & Exploration Association (APPEA), said today.

"It is very difficult to separate the operation of domestic natural gas markets from other aspects of energy, such as ensuring supply reliability, emerging trends in transport fuels markets and energy commodity exports", Mr Jones said.

"Equally, it is difficult to evaluate the Review's proposals on greenhouse policy when government and industry are still in the process of developing new comprehensive greenhouse policy proposals in the national Government/Industry Greenhouse Policy Dialogue" established in August 2002.

"The Draft Report raises a number of complex issues for the upstream oil and gas industry and these will have to be considered in depth before APPEA makes a submission on the Draft Report".

Mr Jones said issues that would be priorities for consideration by oil and gas producers and explorers would include the reopening of upstream gas market competition issues which have been repeatedly reviewed over recent years. Key aspects include acreage release processes, access to gas processing facilities and joint marketing arrangements.

Trading and regulation were areas of concern, APPEA said, with the need to look at proposals to introduce emission permit trading and the proposal to establish a single national energy market regulator.

Other issues that APPEA were concerned about were the implications of the Review's proposals for joint marketing on future LNG exports.

APPEA also said the question needed to be asked whether changes to the acreage release process would undermine the attractiveness of Australia as a place to explore for oil at a time when the nation is facing a major decline in production levels?

Mr Jones said APPEA's Energy Policy Committee would be meeting next week to fully evaluate the Review's draft recommendations and to consider APPEA's response to them.

He welcomed the opportunity to have in depth discussions with review panel members today so as to quickly gain an appreciation of the complexities of the draft report.